Czech bank bets on boom in contactless

There’s another new name in Europe’s mobile payments space as a bank in the Czech Republic becomes the latest to bet on customers wanting to make transactions with their mobiles with the launch of a new mobile wallet for NFC payments.

ČSOB, which is part of the Belgian KBC Group, says users of its NaNákupy wallet will be able to use the service to pay online and monitor transactions made on mobile online by the end of the year.

Other features available by the end of 2016 will include on-boarding loyalty cards and receipts, sharing shopping lists, and sending notifications on goods warranties and insurance expiration dates.

The wallet, which is also available to customers of other banks, uses host card emulation (HCE) to let customers pay for goods with their smartphone via their MasterCard or Visa accounts.

NaNákupy is built on top of infrastructure developed by digital payments firm SIA, which virtualises existing cards inside the wallet and lets customers leave their plastic at home.

SIA SVP Nicola Cordone says the high adoption of retail NFC transactions in the Czech Republic means it is an “ideal” region for mobile payments.

Host card emulation

For a refresher: HCE is software that creates a precise ‘virtual’ representation (or emulation) of a card, be that a banking or payments card, a card you use to access the building or a travel card. Before HCE, NFC devices tended to use secure elements to make NFC payments.

This latest news chimes with a report from UK research house Juniper earlier this year, predicting that banks will “widely deploy” solutions based on host card emulation (HCE) technology. Dutch banking group ING, for example, added HCE contactless payments to its banking app toward the end of last year.

With sensitive data is secured in the cloud, rather than the device, the technology was already being used by more than 50 financial institutions including Barclays by Juniper’s reckoning at the time.

“The combination of HCE and tokenisation is extremely attractive to banks,” says Juniper analyst Windsor Holden.” HCE means that they are not dependent on a mobile operator to enable the service; tokenisation reduces the burden on the issuer and allows them to use their existing infrastructure.”

Meanwhile the research is less optimistic about the NFC sticker solution that was conceived to patch the interim time before NFC capability was baked into a device due to security concerns.

European mobile payments

Looking at the broader picture, the move comes as European consumers and business continue to push rapid adoption of contactless payments technology, driven primarily by contactless cards.

In April, Visa Europe said that three billion contactless transactions have been made using its cards on the continent in the previous 12 months. A report from MasterCard in February said payments made using MasterCard and Maestro surpassed 1bn in 2015 – a 150% uptick in transactions compared to a year earlier.

Payments is one of the most crowded industries around right now and while there are signs of consolidation in some parts of the industry such as point of sale, others are likely to get busier before there is a shake out: mobile wallets is one of them.

In June got another mobile wallet in the shape of GRPPY, which was launched by Germany’s Wirecard and mobile loyalty and payments firm MyOrder, which launched eight years ago and snapped up by Dutch banking and financial services firm Rabobank in 2012.

Available in the Netherlands, this is aimed at group purchases and helping to eliminate the hassle of paying friends back for things like tickets, dinner or household purchases among flatmates. It looks to tap into a very real and annoying problem that services like Venmo are solving with great success in the US.

I caught up with Guillaume Andre, Head of Marketing, Ingenico Northern Europe, to discuss the implications of a tech giant-payments provider collaboration-led future, and how Ingenico and Google might continue to innovate the POS system in the future.

The future is even closer than we think. The increasing pace of technological change means concepts formerly considered only abstract theories on a distant horizon are already nearly upon us. By Urs Gubser, Head E-Commerce, SIX Payment Services.